In September 2015, Mark Carney, Governor of the Bank of England, issued a clear warning about the Tragedy of the Horizon, stating that by the time climate change impacts financial stability, it will already be too late.

Taking immediate action, the G20 formulated the Task Force on Climate-related Financial Disclosures (TCFD) – to help business compile and organize the information needed to understand and address climate-related financial risk.

Just over one year ago, the TCFD released its final recommendations. Companies now have a clear framework to improve their climate-related financial disclosure. At WBCSD, we believe the Task Force will impact corporate governance around the world through these key recommendations.

In 2017, WBCSD was asked to facilitate and support “Preparer Forums” to help companies implement the TCFD’s recommendations in priority sectors and industries including oil and gas, chemicals and electric utilities.

Since October 2017, we’ve been working with four European oil and gas majors - Eni, Equinor (formerly Statoil), Shell and Total - to identify effective disclosure practices and explore what’s needed to support implementation of the recommendations over time.

Our aim with the report released today is to provide practical insights from leading businesses and contribute to ongoing discussions about implementing the TCFD's recommendations. We want to amplify the voice of business, non-financial preparers and address the challenges and opportunities associated with the TCFD’s recommendations.

Here are some of the key takeaways from our efforts so far:

Collaboration is key.

One of the most important first practical steps for companies considering disclosures according to the TCFD’s recommendations is to foster internal collaboration across different departments and teams, including finance, risk, investor relations, legal and sustainability. The insights, skills and perspectives from each of these functions contribute to a more integrated and holistic approach and understanding of climate-related risks and opportunities.

Preparers and users need to talk to each other.

It’s so important for both preparers and users of climate-related financial disclosure to connect and converse with each other.

We consulted informally with a group of investors (self-selected ESG, credit and sell-side analysts), to seek general views on the TCFD’s recommendations and what they mean for companies.

But this is only the beginning.

More dialogue is needed.

We look forward to collaborating with key actors to extend and develop investor engagement on TCFD implementation and what it means for the oil and gas sector.

The efforts of the Principles for Responsible Investment (PRI), Climate Action 100, the Institutional Investors Group on Climate Change (IIGCC) and the United Nations Environment Program Finance Initiative (UNEPFI), among others, make critical contributions to improving understanding on what financial institutions need from climate-related financial disclosures.

Next steps.

Building on the efforts of the TCFD Oil & Gas Preparer Forum and learnings from the process, we are now embarking on a similar journey with companies from the electric utilities and chemicals sector.

The companies in these sectors have demonstrated great leadership in supporting the TCFD. Together, we’ll continue to enhance transparency on climate-related financial risks and opportunities.